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"From the eurozone economies to commodities, stock markets to bond yields, signs of deflation are once again cropping up. With many central banks around the world having exhausted their stimulus options in the years since the recession, the question now is how they will react to recent events." Deflation fear rearing its ugly head again
If you want to get higher prices when you are in a liquidity trap then you need higher wages.
You can drive inflation with the minimum wage law.
"From the eurozone economies to commodities, stock markets to bond yields, signs of deflation are once again cropping up. With many central banks around the world having exhausted their stimulus options in the years since the recession, the question now is how they will react to recent events." Deflation fear rearing its ugly head again
If you want to get higher prices when you are in a liquidity trap then you need higher wages.
You can drive inflation with the minimum wage law.
Or just print United States Notes again instead of just Federal Reserve Notes, and start using them to pay off the national debt. Presto! Inflation occurs.
If that doesn't work then start sending everyone $1000/year for free by printing more United States Notes.
Or just print United States Notes again instead of just Federal Reserve Notes, and start using them to pay off the national debt. Presto! Inflation occurs.
If that doesn't work then start sending everyone $1000/year for free by printing more United States Notes.
The $1k a year mint work. But we live in a global economy. We in the US are doing relative well, in the EU and Asia they aren't doing so well. The Fed has printed enough money to goose our economy. And the high oil prices have got an oil boom going. Over there, the world monetary fund's preaching of austerity has them set for deflation. They need higher wages to get higher prices.
"From the eurozone economies to commodities, stock markets to bond yields, signs of deflation are once again cropping up. With many central banks around the world having exhausted their stimulus options in the years since the recession, the question now is how they will react to recent events." Deflation fear rearing its ugly head again
If you want to get higher prices when you are in a liquidity trap then you need higher wages.
You can drive inflation with the minimum wage law.
Horsecrap. Another thread by someone wanting to get paid more than they are worth. Deflation is coming, it is a natural part of the economic cycle, and nothing can prevent it as we have seen by the massive but impotent influx of money by the worlds central banks. They were only able to postpone it for a few years while making the underlying problem much worse.
Horsecrap. Another thread by someone wanting to get paid more than they are worth.
I don't want to raise our minimum wage, or at least not until the world is getting paid US minimum wage.
Quote:
Originally Posted by jimhcom
Deflation is coming, it is a natural part of the economic cycle, and nothing can prevent it as we have seen by the massive but impotent influx of money by the worlds central banks.
Deflation is one way to get debt destruction. Inflation is another.
Quote:
Originally Posted by jimhcom
They were only able to postpone it for a few years while making the underlying problem much worse.
Deflation favors those with cash. Inflation driven by wages favors those that work for their money. What I want to see is some kind of mechanism to impose US minimum wage on the whole world. That would cause inflation.
One way to do that is to put a 110% tax penalty on dividends paid by any corporation that employes any one at less than US minimum wage (world wide) or beys something made by someone working for less than that amount.
I don't want to raise our minimum wage, or at least not until the world is getting paid US minimum wage.Deflation is one way to get debt destruction. Inflation is another.Deflation favors those with cash. Inflation driven by wages favors those that work for their money. What I want to see is some kind of mechanism to impose US minimum wage on the whole world. That would cause inflation.
One way to do that is to put a 110% tax penalty on dividends paid by any corporation that employes any one at less than US minimum wage (world wide) or beys something made by someone working for less than that amount.
The central bankers can't fix this problem.
Playing with the minimum wage can.
Deflation and inflation need to be allowed to happen as functions of the free market and not induced by monetary policy in order to manipulate markets.
Minimum wage is a cruel farce and needs to be eliminated not spread worldwide. Wages are a function of the supply and demand of labor. The labor supply is manipulated by governments that promote immigration of cheap labor to drive down labor costs by inflating labor pools.
You cannot repair the damage done by one government manipulation of the marketplace by inducing another.
Deflation and inflation need to be allowed to happen as functions of the free market and not induced by monetary policy in order to manipulate markets.
Worshiping the free market as the holy grail of economic systems is all nice a good. But the other players in the worlds economy aren't so fussy about actively manipulating their economies at our expense.
Quote:
Originally Posted by jimhcom
Minimum wage is a cruel farce and needs to be eliminated not spread worldwide.
You are thinking nationally and not globally
Quote:
Originally Posted by jimhcom
Wages are a function of the supply and demand of labor.
That is a gross and misleading over simplification. Henry Ford figured out that you have to pay your workers bey what they make. World wide we currently have an over supply of labor and an under demand for goods and servicess.
Quote:
Originally Posted by jimhcom
The labor supply is manipulated by governments that promote immigration of cheap labor to drive down labor costs by inflating labor pools.
You are so thinking in a national economy. We are in a global economy. What they are doing now is moving the work but not the pay. The new term is GWP. Gross World Product. If you move a job from a $20 an hr labor pool too a $1 an hr Labor pool and the people that were making $20 place their jobs with ones that pay on average $5 hr less then y need to over pay the new workers by $5 hr or you get a contraction in GWP. We are looking at that contraction coming.
Quote:
Originally Posted by jimhcom
You cannot repair the damage done by one government manipulation of the marketplace by inducing another.
Then what do you propose to do about Japan's, China's, etc. active
manipulation of their economies to promote high exports and protecting their domestic economies? Sit back and enjoy the next economic depression? That is what you call world wide deflation. And that is coming.
But if we require and enforce higher wages globally then we will get inflation and wide spread economic prosperity. There a few people that aren't going to like that but they can deal with it.
But if we require and enforce higher wages globally then we will get inflation and wide spread economic prosperity. There a few people that aren't going to like that but they can deal with it.
I believe you imagine we (the USA) have far greater power than we really do in directing the rest of the world's actions.
Worshiping the free market as the holy grail of economic systems is all nice a good. But the other players in the worlds economy aren't so fussy about actively manipulating their economies at our expense. You are thinking nationally and not globallyThat is a gross and misleading over simplification. Henry Ford figured out that you have to pay your workers bey what they make. World wide we currently have an over supply of labor and an under demand for goods and servicess. You are so thinking in a national economy. We are in a global economy. What they are doing now is moving the work but not the pay. The new term is GWP. Gross World Product. If you move a job from a $20 an hr labor pool too a $1 an hr Labor pool and the people that were making $20 place their jobs with ones that pay on average $5 hr less then y need to over pay the new workers by $5 hr or you get a contraction in GWP. We are looking at that contraction coming. Then what do you propose to do about Japan's, China's, etc. active
manipulation of their economies to promote high exports and protecting their domestic economies? Sit back and enjoy the next economic depression? That is what you call world wide deflation. And that is coming.
But if we require and enforce higher wages globally then we will get inflation and wide spread economic prosperity. There a few people that aren't going to like that but they can deal with it.
You are really living in a fantasy world full of if's. If you think the wealthy are ever going to succumb to a system of fairness for working people you would be better off spending your time praying to the Easter bunny to bring you a large basket of gold eggs.
Deflation favors those with cash. Inflation driven by wages favors those that work for their money. What I want to see is some kind of mechanism to impose US minimum wage on the whole world. That would cause inflation.
One way to do that is to put a 110% tax penalty on dividends paid by any corporation that employes any one at less than US minimum wage (world wide) or beys something made by someone working for less than that amount.
The central bankers can't fix this problem.
Playing with the minimum wage can.
Technically, inflation favors those with fixed debt and variable income, while deflation favors those with fixed assets and variable expenses.
Put another way, inflation favors the workers with a mortgage, deflation favors those with a cash reserve renting and paying other expenses.
The source of the inflation/deflation is irrelevant to the direction of the impact.
As for your suggestion of penalty... let's play that out.
Who do you think has the authority to impose that tax? Each country has the right to tax it's citizens and those conducting business in it's country by it's own terms. Even "fair trade" agreements are only upheld by the threat of other countries retaliating with their own sanctions against any offending company.
At best, you might be able to get the US to impose this... but what would that accomplish? First off, what you're actually talking about is outlawing dividends, because a 110% tax means you not only lost the dividend, but have to pay a penalty for the fact that the business tried to give you money.
So... you've now tied up the cash in the business.
A) CEO salaries jump through the roof
B) They don't go up, but employee wages do in the US and for US based companies, leading to higher manufacturing costs and Non-US companies dominate the global market. The US just winds up going the isolationist route(and we've seen that it doesn't work well for an economy to do that, which is why countries open up to the global market)
C) Companies laugh at you for thinking a dividend is the only way to give shareholders money and then proceed to perform stock buybacks, raise share prices, and give owners money that way (aka, exactly what apple did to avoid taxes on the profit oversees).
Considering C has already happened, I'm betting on that if this were to ever pass... but both A & B negate your idea as well.
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